How to tone thighs

reduce body fat percentage + squats. squats with heavy weights if poss (depending on your knees, check with a doc/physio first and be meticulous about form)

fat on thighs is from body fat percentage, but depending on your body type this may be the last place to lose it from, in which case be happy because I tend to store subborn fat around my middle, which IMO is worse (but hey, the grass is always greener lol). Anyway, working your leg muscles hard + eating at a sensible deficit = leaner, firmer legs

What do you mean by tone? Most people mean they want to see less jiggle and more muscle definition...that is achieved through lowering body fat. Activities like squats are good for developing the muscle underneath more...but that muscle is revealed when body fat is low enough. Unfortunately, you can't lose weight from a specific area...it comes off where the body wants to let it go first.
A combination of eating at a deficit, some cardio, and strength training is best. I use the You Are Your Own Gym app for bodyweight exercises. Any full workout program you look at will probably have lunges incorporated...you will just have to work around the activities that are a problem for your knees.